Tax systems in the world operates a tripod tax structure, Nigeria’s tax system is not an exception to this. The tripod comprises of Tax Policy, Tax Legislation and Tax administration. The tripod is what drives a successful tax system, thus, where any of the legs of the tax tripod is not in harmony with others, the tax structure might not be effective and efficient.

Tax policy, which is the first leg of the tripod, is the foundation for tax laws and administrations. The tax policy is the direction which the political class in a country wants the tax systems to follow. A country’s tax policy is a document that lays down the features of our tax system and all other matters that are consequential to the tax system.  In other words, the tax policy is a set of guidelines, principles and rules that guides the system of taxation. Most tax policies usually align towards the canon taxation (check our previous article on the canons of taxation).

Nigeria’s National Tax Policy was first published in 2012 and a revised edition was approved by the Federal Executive Council in February, 2017. The overview of the document provides that the National Tax Policy “seeks to provide a set of guidelines, rules and modus operandi that would regulate Nigeria’s tax system and provide a basis for tax legislation and tax administration”. The objectives of the National Tax Policy are to solve the various problems facing our tax systems. Nigeria’s non-oil tax revenue-to-GDP ratio is one of the lowest in the world, and this is one of the numerous reasons that prompted the National Tax Policy.

However, a tax policy cannot be enforced by the government if they are not enacted into laws by the National assembly. The legislations provides for the modes of collecting taxes, the rates, the relevant authority, the sanctions for defaulters and all other ancillary issues that would make the tax system efficient and effective. Some of the tax laws effective in Nigeria include;

Federal Inland Revenue Service (Establishment) Act No. 13 of 2007
Companies Income Tax Act (CITA) CAP C21 LFN, 2004 (commencement 1st Jan, 1958)
Personal Income Tax Act (PITA) CAP 8 LFN, 2004 (as amended)
Petroleum Profits Tax Act (PPTA) CAP 13 LFN, 2004 (commencement 1st Jan, 1958)
Deep Offshore and Inland Basin Production Sharing Contracts Act
Value Added Tax Act (VATA) CAP D1 LFN, 2004 (commencement 1st Dec, 1993)
Education Tax Act CAP E4 LFN, 2004 (commencement 1st Jan, 1993)
Capital Gains Tax Act (CGT) CAP C1 LFN, 2004 (commencement 1st April, 1967)
Stamp Duties Act CAP S8 LFN, 2004 (commencement 1st April, 1939)
National Information Technology Development Agency Act (NITDA)
Nigeria LNG (Fiscal Incentives, Guarantees & Assurances) Act
Industrial Development (Income Tax Relief) Act
Industrial Inspectorate Act
Investment and Securities Act, 2007
Insurance Act of 1997 (as amended)

However, it should be noted that the policies which are translated into laws cannot have the effect intended by the policy makers if there are no Tax Administrators. Tax administration is simply the implementation of the tax policies codified into laws to achieve the objectives. The Tax administrators are usually provided for in the enabling law for various types of taxes i.e. the laws that establish a certain type of tax would provide for the body that should be responsible for the administration of the tax. The following are the tax administration bodies in Nigeria.

Federal Inland Revenue Service (FIRS): they are in charge of the assessment, collection and overall administration of all Federal taxes. The FIRS is established by the Federal Inland Revenue Service (Establishment) Act of 2007.
State Boards of Internal Revenue: they are to the state governments, what the FIRS is to the Federal Government. The Board is established by the Personal Income Tax Act.
The Joint Tax Board: there are some taxes such as the Personal Income Tax that is administered by the Federal and State agents. Thus, in order to ensure uniformity the JTB would meet to resolve areas of crisis. The board serves as a ‘mother body’ for all tax authorities in the country. The board consists of a representative of the Federal Government and each of the 36 states. Lastly, the board advises all tiers of government on tax issues and promotes uniformity in the administration of Tax.
Joint State Revenue Committee: the committee simply implements the decisions of the JTB, advice the board alongside the state and local governments. The committee is established Personal Income Tax Act for each state.
Local Government Revenue Committee: as the name implies, the committees is in charge of all taxes and revenues (fines, levies and rates) that accrues to the Local government.

In conclusion, the tax tripod is a triangle of interconnected parts, wherein the absence of an angle would make the triangle less of one.


MOSHOOD ABDULMAJEED ADENIYI is currently a final year student of law, Univeristy of Ilorin. He is passionate about legal research and a diligent tax euthusiast. He can be reached via Email:

 Mobile No: 09030528182



You may also like...